Sentinel Asset Management Pty Ltd v Primo Moraitis Fresh Pty Ltd

Sentinel Asset Management Pty Ltd sought to determine the market rental value for commercial premises leased by Primo Moraitis Fresh Pty Ltd under a lease agreement that provided for periodic rent reviews. Sentinel, the landlord, issued a notice of its valuer's assessment of the current annual market rent, which Primo, the tenant, contested. Primo argued that the rent should be fixed at its own valuer's assessment and raised several grounds for relief, including a declaration that the rent should be set at its proposed rate. Sentinel contended that it had complied with the procedure in the lease and acted reasonably, honestly and in good faith in its assessment, and that Primo had failed to comply with the lease's procedural requirements by providing its assessment late.

The court considered the terms of the lease, the respective valuer's assessments, and the procedural requirements for conducting a rent review. It assessed whether Sentinel had properly followed the process outlined in the lease when determining the market rental value and whether Primo's failure to provide its assessment on time justified any relief. The court found that Sentinel had complied with the lease's requirements and acted reasonably in determining the current annual market rent. The court also found that the time for providing the tenant's valuer's assessment was of the essence, and that Primo's failure to provide its assessment on time did not warrant any relief.

Accordingly, the court dismissed Primo's application and declared that the market rental value under the lease from 7 May 2014 was the amount stated in Sentinel's notice, namely $1,296,295 per annum plus GST. The court's decision emphasised the importance of adhering to the procedural requirements for rent reviews as set out in the lease agreement and the consequences of failing to meet those requirements.